Options for Monetary Integration in the Andean Community
Object of this paper is to examine the options for monetary integration in the Andean Community, in the context of existing literature on the subject. After a survey of the relevant literature, some stylised facts of the Andean Community are examined. Optimum Currency Area criteria are considered, a...
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| Formato: | Artículo científico |
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Universidad Central de Venezuela
2003
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| Acceso en línea: | http://www.redalyc.org/articulo.oa?id=36490104 http://biblioteca.clacso.edu.ar/gsdl/cgi-bin/library.cgi?a=d&c=ve/ve-004&d=36490104oai |
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| Sumario: | Object of this paper is to examine the options for monetary integration in the Andean Community, in the context of existing literature on the subject. After a survey of the relevant literature, some stylised facts of the Andean Community are examined. Optimum Currency Area criteria are considered, as are some indictors of fear of floating and dollarization within the region. I argue that the traditional literature on monetary integration has been developed largely with the intent of explaining integration in Europe, and to consider instead monetary integration in Latin America we need a new framework, one that takes into account the particular characteristics of these economies: fear of floating, original sin, dollarization, and large and volatile capital flows, subject to financial contagion and sudden stops. In conclusion I examine the pros and cons of three possible options available to the Andean Community: mutual exchange rate pegging, a common regional currency and dollarization. |
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